'This is a total casino': Samsung, SK hynix shares swing 20% in a day — and analysts warn it will get worse

Broadcaster Mija posted a photo on her Instagram story on Thursday alongside the caption: "Hah… I uploaded a video about buying SK hynix on YouTube on Friday, and then this happens." The photo showed SK hynix shares had plunged more than 13% from the previous session. [Photo, Mija SNS]

"Will the heaven-and-hell volatility keep going?"

"If you cannot hold on, cut your position."

The swings have been nothing short of historic. Samsung Electronics and SK hynix, which each plunged around 10% on Friday, staged sharp recoveries Saturday, surging roughly 10% apiece. Intraday moves of nearly 20% — both up and down — have left retail investors venting online: "This is a total casino," and "I could not take it anymore — I sold."

Analysts expect the extreme volatility to persist for now and are advising investors who cannot stomach the swings to reduce their exposure.

Despite record earnings outlooks, concerns about a peak in the semiconductor cycle have resurfaced, rattling the share prices of both Samsung Electronics and SK hynix. Analysts say such noise is unlikely to go away anytime soon.

Single-stock 2x leveraged exchange-traded funds tracking Samsung Electronics and SK hynix have drawn particular criticism as a key driver of the wild swings, amplifying gains in rallies and deepening losses in selloffs.

Samsung Electronics headquarters [Photo, Lim Se-jun]

Samsung Electronics closed Saturday up 8.22%, or 23,500 won ($17), at 309,500 won. SK hynix surged 10.88% to finish at 2.425 million won.

Both stocks had tumbled Friday — Samsung Electronics by 9.06% and SK hynix by 14.57% — and opened lower again Saturday, falling 0.87% and 6.49% respectively in early trading. They then reversed course: Samsung Electronics climbed as high as 313,000 won, up 9.44% at its intraday peak, while SK hynix touched 2.454 million won, a gain of 12.21%.

The recent selloff in semiconductor stocks has been driven largely by concerns over slowing memory chip demand — concerns that analysts say lack a clear factual basis. Because Samsung Electronics and SK hynix shares had already risen sharply, even minor negative noise has been enough to trigger outsized moves.

"This correction looks more like a valuation de-rating driven by noise than any actual deterioration in fundamentals," said Lee Jae-won, an analyst at Yuanta Securities Korea.

"The volatility we are seeing in semiconductor stocks lately is less a new negative catalyst and more a process in which conflicting interpretations of the same situation are unsettling investor sentiment," said Jo A-in, an analyst at Samsung Securities.

Brokerages largely view the market's concerns as overblown and have been raising their price targets. Their reasoning: memory chip supply still cannot keep pace with demand, and the earnings outlook for both companies remains solid.

Korea Investment & Securities raised its price target for Samsung Electronics to 590,000 won, while KB Securities and Sangsangin Investment & Securities lifted their targets for SK hynix to 4.2 million won and 3.8 million won, respectively.

Meanwhile, investors in the single-stock 2x leveraged ETFs — widely blamed for amplifying volatility — have largely failed to profit, with many actually posting losses or underperforming the underlying shares of Samsung Electronics and SK hynix.

According to industry data, while Samsung Electronics shares rose 11.5% over the past month, the corresponding 2x leveraged ETFs returned close to zero for most investors. SK hynix leveraged products showed a similar pattern. Analysts attribute the underperformance to the "negative compounding effect" that erodes returns on leveraged products during periods of high volatility.

park@heraldcorp.com